Google Adsense that gives you code that you embed in your site to display google advertisements. It didn’t pay me well – but it paid Google well – so I took Google ads off my blog. I figure if I ever get really popular, the advertisers can come ask me for space. Until then, I am not allowing Google to earn another dime from my blog.
I got wiser to Google when I started using Adwords here at work. Adwords are ads you build that Google will place on sites using Adsense. Adwords ads cost money and you pay whenever someone clicks on the ads. You choose keywords you want to advertise toward. Maybe you’ll choose “goat food” because you sell goat food on your web site. You want people searching for the term goat food to find your site.
So you want your ad to come up on the first page (on the right column) each time someone searches for the word goat food or you want it to appear on other people’s goat food web sites who use Adsense. Google assigns a value to the term goat food that you pay per click. If someone clicks on your ad, you pay the price per click that Google has established for that keyword. I’ve paid from about .40 to $1.25 per click. But I’ve seen clicks that cost a lot more than that. The person who owns the web site where these ads are placed gets a small fraction of that money. I used to get a penny, two, maybe three for ads on my site that got clicked. Google takes the rest.
Adwords & Adsense work well for Google. The owners of the web sites do all the work to place the Adsense ads on their sites. The Adwords advertiser does all the work to create the ads that are placed on web sites in anticipation that these clicks will turn into sales. Google does no work to create or place the ads.
Google’s work was to create the search engine, and two automated online systems; 1) Adsense that enables web site owners to place a Google money machine (ad server) on their site, 2) Adwords for advertisers to create ads that web site owners place on their sites and which Google places on their search web site.
Google is the ultimate middle man. In reality, Google skims almost 100% of the gross for perhaps 5% of the work. Google’s overhead is a matter of keeping their search engine relevant and the Adwords and Adsense sites running. Google does not even “sell” advertising, no sales force is needed.
Google is leasing space on millions of web sites using Adwords and Adsense at pennies on the dollar. It’s a brilliant business model as long as web site owners don’t wise up and dump Google. It took me several years to wise up. The business model is sort of like land owners all over the country saying that Google can set up billboards on their land. Google collects $1,000 -$10,000 a sign per year from advertisers and pays the landowner 1%. The land owner even has to build the sign! Internet land owners are eventually going to wise up and ask for a higher percentage or say get lost.
Google ads don’t make anyone rich but Google.